Alkermes Plc (ALKS)

Cash conversion cycle

		Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019
Days of inventory on hand (DOH)	days	101.30	98.58	94.18	88.27	71.18	72.59	75.65	76.97	70.31	67.13	68.06	68.89	65.62	65.63	66.01	60.66	78.46	71.82	64.74	59.69
Days of sales outstanding (DSO)	days	89.80	89.80	67.74	74.00	78.53	84.58	88.87	95.60	83.77	77.12	76.60	98.37	94.17	99.36	85.76	97.27	83.54	75.39	76.30	81.14
Number of days of payables	days	19.63	53.03	36.58	31.09	32.23	32.44	15.19	13.94	14.04	17.28	12.18	25.53	17.45	15.82	17.76	22.21	52.92	31.42	25.57	31.82
Cash conversion cycle	days	171.46	135.35	125.33	131.18	117.47	124.74	149.33	158.64	140.04	126.98	132.48	141.73	142.34	149.17	134.01	135.72	109.09	115.80	115.47	109.02

September 30, 2024 calculation

Cash conversion cycle = DOH + DSO – Number of days of payables
= 101.30 + 89.80 – 19.63
= 171.46

The cash conversion cycle of Alkermes Plc has shown some fluctuations over the past few periods. The company's cash conversion cycle, which represents the time it takes to convert its investment in inventory and other resources back into cash, was 171.46 days as of September 30, 2024. This indicates that, on average, it takes Alkermes Plc approximately 171 days to complete a full cash conversion cycle.

Looking at the trend, the cash conversion cycle has fluctuated across the periods, ranging from a low of 109.02 days as of December 31, 2019, to a high of 171.46 days as of September 30, 2024. A shorter cash conversion cycle is generally considered favorable as it implies that the company is efficiently managing its working capital. Conversely, a longer cash conversion cycle may indicate inefficiencies in managing inventory, receivables, and payables.

Based on the data provided, Alkermes Plc experienced a peak in its cash conversion cycle as of September 30, 2024, which may warrant further analysis to understand the reasons behind this increase. Analyzing the components of the cash conversion cycle, including the days inventory outstanding, days sales outstanding, and days payables outstanding, could provide insights into where the inefficiencies lie and help the company identify areas for improvement in managing its working capital.